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You need a Will, to pass things down the line

A Last Will and Testament can be a tricky or confusing thing to do when you’re unsure what a Will means. There are key things that a Last Will and Testament can do that provides the security blanket that you’re searching for when looking for family protection.

A Last Will and Testament allows the testator (the person creating the Will) to specify:

Who receives property at the testator’s death.

Whether beneficiaries receive gifts outright or in trust.

Who will act as personal representative.

Who will be the guardian of minor children. In the absence of a will, these matters are settled by state law.

Everyone needs a Will of some sort and more specifically to cover assets. And you should include people who will benefit from the Will, including people who are not heirs. Wills are needed to provide for a person who is not an heir under state law—unmarried partners, stepchildren, friends, charities, in-laws, etc.

Exclude an heir. – Heirs are the persons who inherit an estate under state law in the absence of a will. A Will is needed to prevent an heir from inheriting probate assets.

Minors and disabled adults. – Trust provisions can be included in a Will to delay receipt of an inheritance or to allow assets to be used on behalf of an adult who is disabled.

Estate tax planning. – Married couples can include trust provisions to reduce estate tax. The disposition of property after death depends on the form of ownership of each asset. Some assets may need to be referred to Probate Court while others pass automatically to new owners. Property ownership is a matter of state law so rules vary. Generally:

Joint assets. – Joint tenancies and tenancies by the entirety pass to the surviving joint tenant. Bank accounts in joint tenancy are only for convenience and not intended to pass the property to the surviving joint tenant. These may be considered probate assets in some states.

Assets with designated beneficiaries. – Life insurance policies, annuities, IRAs, and similar assets pass to designated beneficiaries if the beneficiaries are alive when the insured person or plan owner dies. Pay-on-death (POD) bank accounts and transfer-on-death (TOD) security registrations also pass assets to beneficiaries. TOD deeds (available in some states) allow real property to pass to a beneficiary without probate.

Trust assets. – Property passes to beneficiaries specified in the Trust document.

Life estates and remainders. – Property passes to the remaining owners at the death of the life tenant.

Other assets – those that will not pass automatically to new owners at death—are subject to state probate rules. These assets pass to the beneficiaries named in the decedent’s will or, if none, according to state intestacy law.

Probate is the court-monitored process for administering the estate of a decedent. The process includes notifying heirs, submitting and validating the Will, collecting decedent’s assets, paying taxes and creditors, and distributing property to the estate’s beneficiaries. An estate is probated in the decedent’s state of domicile. If the decedent owned real property outside his or her home state, an ancillary probate proceeding in that state may also be required. Probate is required if the decedent’s probate assets are above the state’s threshold (generally $10,000 –$100,000). When probate is required, non-probate assets are not included in the proceeding.

When you have questions about Wills and Estates, Rukosky & Associates can help! Click here to schedule an appointment today.

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